Tesla CEO Musk accused in lawsuit of defrauding shareholders

By

REUTERS

Saturday Aug 11, 2018

Elon Musk — the founder, CEO, and lead designer at SpaceX, and the co-founder of Tesla — speaks at the International Space Station Research and Development Conference in Washington, US, July 19, 2017. REUTERS/Aaron P. Bernstein/Files

Tesla Inc and its CEO Elon Musk were sued on Friday by an investor who said they defrauded shareholders in a scheme to manipulate the electric car company’s stock price, starting with Musk’s August 7 tweet that he might take Tesla private.

In a proposed class-action complaint filed with the federal court in San Francisco, Kalman Isaacs said the scheme was conducted in part to “completely decimate” short-sellers, eventually leading to an inquiry by the US Securities and Exchange Commission (SEC).

The class includes investors who bought Tesla shares as they were rising in the wake of Musk’s tweet. The share price later fell.